Circor International (CIR), provider of valves and other highly engineered products for markets including oil & gas, power generation and aerospace & defence, reported an 85.03 percent jump in profit for the quarter ended Mar. 30, 2014.
The company earned $14.63 million or $0.82 a share in the first-quarter, compared with $7.91 million or $0.45 a share a year ago. Analysts on average had predicted net income of $0.70 a share.
The company has made tax provision of $5.83 million in the first quarter compared with $3.59 million in the last year period. That has resulted into substantial rise in the profitability.
Revenue during the first-quarter went up marginally 2.82 percent to $211.19 million from $205.40 million in the last year period.
Gross margin expanded by 147 basis points over the last year period to 30.61 percent.
Total expenses as a percentage of revenues decreased to 90.10 percent from 93.72 percent in the same period last year. That resulted in improvement of 362 basis points in operating margin to 9.90 percent.
The company posted operating income of $20.91 million, compared with an operating income of $12.90 million in the previous year period.
''CIRCOR began 2014 with strong first-quarter operating results,'' said Scott Buckhout, CIRCOR president and chief executive officer. ''Our margin expansion initiatives continued to gain traction with adjusted operating margins up year-over-year by 230 basis points to 9.4%. Margins improved across most of our businesses. We had strong sales growth in our upstream markets, particularly in our large international projects business and our instrumentation and sampling business.''
''Q1 order intake was down over last year primarily due to orders from our project businesses, which can vary significantly from quarter to quarter. We remain bullish on our energy end markets and expect solid order intake for the full year,'' said Buckhout.
''For the second quarter of 2014, the company expects revenues in the range of $220 million to $230 million; adjusted earnings per share, excluding special charges, in the range of $0.88 to $0.94; and, restructuring related costs of approximately $5 million to $6 million,'' the company said.
Cash flow
Circor International has generated cash of $17.06 million from operating activities during the quarter, up by 193.73 percent or $11.25 million when compared with the last year period. It has generated 8.08 cents of operating cash flow in every sales dollar for the quarter, up from 2.83 cents for the same period last year.
The company has spent $2.66 million in cash to meet investing activities during the quarter, as against cash outgo of $4.63 million in the year period. It has made net capital expenditure of $2.66 million during the quarter, which was lower by 42.64 percent or $1.98 million from a year ago.
The company's free cash flow accounted for 84.42 percent of operating cash flow for the quarter, compared with 20.23 percent in the last year period.
The company has generated net cash of $6.34 million from financing activities during the quarter, as against cash outgo of $3.07 million in the last year period.
The company has borrowed net of $6.25 million through debt during the quarter. It has raised net of $0.19 million by issuing common stocks.
As on Mar. 30, 2014, Circor International's cash balance stood at $122.10 million, up by 111.85 percent or $64.46 million from Mar. 31, 2013.
Working Capital
Circor International witnessed an increase in the working capital over the year. It stood at $333.52 million as at Mar. 30, 2014, up by $70.91 million or 27 percent from $262.60 million on Mar. 31, 2013. The company's current ratio increased to 2.85 as at Mar. 30, 2014 from 2.45 on Mar. 31, 2013.
Debt Position
Circor International has witnessed a decrease in total debt over the last year. As at Mar. 30, 2014, the company's total debt stood at $56.13 million, down by 15.65 percent or $10.41 million from Mar. 31, 2013.
The company's total debt accounts for 7.45 percent of total assets on Mar. 30, 2014, compared with 9.45 percent on Mar. 31, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 22.77 from 16.39 in the same period last year.
Shares of Circor International rose by $7.15 or 9.78 percent to close at $80.23 on Tuesday.
